Google Paying HTC $1.1B to Bring Over Parts of Its Smartphone Team

The deal also gives Google a nonexclusive license for key parts of HTC's smartphone intellectual property.

Google Pixel

Google, which has been getting help from HTC for years with its Android smartphones, has reached a $1.1 billion agreement with the company to hire some of HTC's best engineers to create new smartphone designs and technologies as it works to expand its sales in the global handset market.

The deal, which was unveiled Sept. 21 after rumors had surfaced the day before, will bring to Google members of the HTC team who have already been involved in designing and building Google's popular Pixel smartphone models, according to a joint statement. Under the agreement, Google is also receiving a nonexclusive license for HTC intellectual property that allows it to be used for Google products in the future.

The deal is not an overall purchase of HTC's smartphone unit but instead gives Google the ability to hire about 2,000 smartphone-focused workers from HTC's team, a Google spokeswoman told eWEEK. The HTC workers will join Google's hardware team as Google employees, she said.

For HTC, the deal with Google will allow HTC to streamline its product line and work to reverse its recent financial difficulties due to competition around the world. HTC will also continue to have its Vive line of popular virtual reality products.

And for Google, the deal will help boost the company's innovations and engineering in creating and producing smartphones on its own to take on Apple, Samsung and other competitors.

"HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market," Rick Osterloh, Google's senior vice president of hardware, said in a statement. "We're excited and can't wait to welcome members of the HTC team who will be joining Google to fuel further innovation and future product development in consumer hardware."

In a Sept. 21 post on The Google Blog, Osterloh wrote, "These future fellow Googlers are amazing folks we've already been working with closely on the Pixel smartphone line, and we're excited to see what we can do together as one team."

The deal furthers those ongoing relationships, which started about a decade ago with the first-ever Android smartphone, the HTC Dream, also was also known as the T-Mobile G1; the Nexus One in 2010; the Nexus 9 tablet in 2014; and the first Pixel smartphone in 2016, wrote Osterloh.

"It's still early days for Google's hardware business," he added. "We're focused on building our core capabilities, while creating a portfolio of products that offers people a unique yet delightful experience only made possible by bringing together the best of Google software—like the Google Assistant—with thoughtfully designed hardware."

Charles King, principal analyst at research firm Pund-IT, told eWEEK that the deal "reaffirms the relationship between the companies and underscores the value of their work together. The fact is that HTC is a premiere maker of Android handsets, and the company will offer Google solid value for competing in a smart phone market shifting toward luxury products like the new iPhone X."

In addition, the transfer of employees involved in Pixel product development and related IP will ensure that Google can retain that talent and technologies in case HTC ever decides to become acquired, said King. "Along that line, the $1.1 billion Google paid offers HTC a substantial cushion that will help it remain competitive while sorting out its financial problems."